the oil, stupid
The energy panic is here. The inevitable crisis
that a handful of us have warned of for over a decade is upon us.
Oils hit US$75 a barrel, driven on by Bushs mad plan to
nuke Iran. Welcome to the rest of our lives. Old Possum said,
taking another sip from his cider.
rest of our lives. Easy for you to say, I thought, remembering that
the old bastard was old enough to have seen Wall Street in 1929. We
were sitting at one of the tables outside the Brushtail Café.
The sun was going down on an amazingly clear Sydney day. Thanks to
an eight per cent drop in petrol sales, and hundreds of thousands
of people quitting the city for the school holidays, the pollution
haze had cleared and you could see into tomorrow.
George Bush is panicking too, I replied. Did you read
where he made a speech on Earth Day, saying the US had to move quickly
towards hydrogen-powered vehicles.
Hes playing with himself again. To replace just half of Americas
ground transport fuels by 2025 (thats mostly petrol) with hydrogen
from electrolysis would require a doubling of electrical energy output.
Thatd be disastrous in terms of global warming, because, realistically,
most of that energy would have to come from burning fossil fuels,
so electrolysis makes little sense for the foreseeable future. And
leaving aside the greenhouse issues, the technical problems with bringing
hydrogen into widespread use as a fuel are just horrendous. Dont
hold your breath waiting for it. Even with a concerted international
push, itd take a couple of decades to get anywhere. Thats
twenty years of oil supplies declining at two per cent, minimum, very
year, with inflation skyrocketing, before hydrogen began to make serious
been calculated that if all Australias current sugar cane production
went into making ethanol wed get about 5 litres per car per
week. Thats about 50 kilometres of driving and no sugar on the
table. And widespread use of electric cars would require lots of extra
power stations and billions of dollars worth of overhaul to the grid.
hes right I reflected. There isnt going to be an elegant
this out, Old said. He unfolding a piece of A4 and smoothed
out the creases. I made up this graph from International Energy
Agency figures for production of oil and natural gas liquids. Its
for the twelve months to February this year. Ive broken it into
OPEC and non-OPEC production. As you can see, output is virtually
but the media is saying thats just caused by this rebellion
in Nigeria, and some refinery problems.
were always production glitches, but in spite of everything, on average,
production has risen to meet increased demand for decades. Now, weve
hit the geological limits. In country after country, oil production
has peaked and then gone into decline. The underlying cause is peak
oil. If you aggregate every country, were now at, or very close
to, the peak of world oil production. From the peak, production will
decline by at least 2 per cent every year. The oil experts have been
warning about this for more than a decade. But guess what: the politicians
and the economists just refused to listen and the journalists wouldnt
do the story because they were scared theyd be laughed at. George
Bush never mentions peak oil but hes a Texas oilman so we can
be sure he believes in it because US oil production peaked thirty
years ago, exactly as predicted.
about the Iraq war?
an object lesson in that. The neocons reckoned it would give the US
an oil windfall so invasion was supposed to be virtually self-financing
instead of which the war dragged on crippling the oil industry there.
And now, with Bushs threats to bomb Iran into submission, every
nation in the world that doesnt actually sit on an oilfield
is shit-scared about security of supplies and theyre all trying
to put their thumb on whatevers available and so theyre
bidding up the price.
a word, the markets panicked.
panic is rational. Everyones scared that everyone else is scared
that the stuff will suddenly be in short supply very, very
short if the Yanks nuke Iran. And they might do that just to deny
Iranian oil to China and other rivals.
politicians should have been taking peak oil seriously a decade ago
I said, twisting the top off another cider. Now its too
late because the lead-times necessary to build new infrastructure
and develop feasible alternatives are huge. Even if the state government
decided right now to build a public transport network to cover the
parts of Sydney where people are totally car-dependent, itd
take twenty years to do it. So were gonna hit the wall, Im
NOW READ ...
your brain Morris, take the train
Oils inexorable decline must drive Sydney public
MATT MUSHALIK and GAVIN GATENBY*
29 September 2005
Possum News Network
will record that the Carr Governments greatest failure was that
it squandered the opportunity to make timely preparations for peak
oil. Few Australians are familiar with this phenomena, but its
ramifications will seep into every aspect of political and social
life in the coming years.
a whole decade state cabinet ignored a sincere and increasingly strident
warning from oil industry experts: the maximum possible level of world
oil production was imminent and would be followed by inexorable decline.
It remains to be seen whether the Iemma cabinet will face the issue
squarely or remain in denial.